Photo of Nicholas Ng: The Edge Singapore
In his earlier testimony, John Soh Chee Wen told the court even as he struggled to rebuild his businesses, he was involved in politics. He became a high-ranking member of the Malaysian Chinese Association, which gave him the platform to build ties.
When former deputy prime minister Anwar Ibrahim was ousted in the wake of the 1997 Asian Financial Crisis, Soh marched with him as protestors took to the streets in Malaysia. Yet, Soh was trusted by Daim Zainuddin, former finance minister and close confidant of former prime minister Dr Mahathir Mohamad.
Among other things, Soh was asked by Daim to help teach his eldest son Wira Dani the “nitty-gritty” details of running a business instead of just pumping in capital. Given how Daim and Anwar were on opposite camps, Soh agreed it was an “odd situation” but put this down to having access to both camps. “There were many times when there have been approaches or attempts to use me to pass messages,” said Soh.
Soh said it was through Daim that Soh first got to understand the mining business. For years, Daim had owned ICB Financial Group Holdings, which was helping Mahathir push a national policy of building ties and investing in Third World countries.
During one of Soh’s trips with Daim to Timbuktu, Mali, the latter was offered a gold concession. That concession was meant to be injected into LionGold that would become a vehicle to acquire stakes in other junior miners looking for additional capital to kickstart production.
Mining interest
Soh told the court LionGold had “all the ducks lined up in a row” with micro and macroeconomic factors perfectly aligned to grow into a leading gold player. For one, there was renewed global investment interest in gold, given how massive liquidity in the financial system at that time was affecting asset prices.
In 2010, Singapore Exchange (SGX) tried to acquire Australia’s ASX. According to Soh, this was a bid to capture the listings of its popular resources sector so that SGX could have a new growth driver. Previous attempts to attract listings from China did not pan out because of “accounting shenanigans” while biotech listings took way too long. In the end, although SGX’s bid for ASX failed because “national feelings” Down Under got in the way, SGX went ahead to promote itself as a good destination for miners to list, said Soh.
Around this time, another mining stock had entered the scene — CNMC Goldmine Holdings. In late 2011, CNMC sought a listing with an IPO price of 40 cents, made its trading debut at 50 cents and continued to rise after that. Soh took it to mean there was an appetite for such stocks, which gave him the confidence that LionGold would do well because while CNMC was focused on its mine in Malaysia, LionGold was on a global acquisition spree for more concessions.
“My pitch has always been Singapore, that there’s a dearth of mining investment opportunities, yet there’s a lot of new money from big names flowing into Singapore,” said Soh, referring to the likes of Eduardo Saverin, Richard Chandler, Gina Rinehart and Robert Friedland, known to be the biggest serial investor in mining who happened to be a Singapore PR.
“At that time, the Singapore market was all about REITs, properties and banks. People will latch on if there are exciting opportunities and if we show them the amazing amazing IPO of CNMC, they will be convinced,” he said.
The momentum Soh had predicted was to come true. In January 2012, “out of the blue” Australian investment group Macquarie became a substantial holder of LionGold and the stock was included in one of the small-cap indices, which meant asset managers of index funds were compelled to buy LionGold shares.
“It was a great honour. It was impossible to predict and all of us were caught by surprise,” said Soh, adding that after Macquarie, big financial institutions like Nomura and Credit Suisse piled in as well.
Soh recalled that one of the “bigger things” going for LionGold was in January 2013 when Nicholas Ng Yick Hing, who was managing DMG, joined LionGold as its CEO. This created “a lot of interesting vibrations” because Ng had ditched his job of running one of the top brokerages along with a pay package estimated by Soh at $2 million per year. Ng also brought with him three other DMG colleagues including Brendan Goh who later became LionGold’s CFO. Ng had earlier testified at the trial and prosecutors, citing multiple inconsistencies between what Ng had said in court and his statements, had applied to impeach him.
Soh also claimed there were potential takeover offers for LionGold from large Chinese enterprises like conglomerate Citic and leading coal miner China Shenhua Energy.
Soh recalled how there were meetings at Ritz Carlton Beijing, owned by Shenhua. However, after rounds of talks, the LionGold shareholders walked away. “We were about to reach critical mass, perhaps six months or one year down the road where we would explore further options because by then it would be very clear that the plan was succeeding,” said Soh.
Plan coming to fruition
However, Soh did not claim credit for all the work. He also hailed the tireless efforts of Peter Chen Hing Woon, who used to be his lawyer and later joined LionGold as its director of business and corporate development, going around tirelessly to engage the investment community, stock exchange and media. Chen, whose numerous brokerage accounts were allegedly used by Soh and Quah for share manipulation, had earlier testified against both.
Soh himself was in the thick of the action, talking to brokers, analysts, investors and “anybody who would listen”, drawing investments from the likes of Hong Kong fund Myriad Investments which pumped in around $20 million.
Soh also described how financial institutions competed to help LionGold raise funds for further acquisitions. Credit Suisse, in March 2013, was appointed to raise $100 million but two other institutions Platinum and Carnegie Hall tried to cut in and offered better terms and bigger undertaking to raise $200 million instead. “Nicholas and Peter had to backtrack and persuade Credit Suisse to withdraw, which eventually they did,” said Soh.
Soh acknowledged that he was aware there was plenty of scepticism about whether LionGold would develop into Asia’s first gold major, but his belief got stronger with more deals done, funds raised, higher interest from global companies and even the recruitment of Ng from DMG.
In his testimony, Soh pointed out that key shareholders who invested early in LionGold did not sell even as its share price went up. For example, in August 2013, when it rose to $1.75 from $1.29, the likes of Neo Kim Hock, Nelson Fernandez, asset manager Van Eck which owned at one point more than 5%, held on to their shares.
“The reasons were clear. It was the roadmap coming to its fruition. Everybody would want to see something that you have invested in for the last one year, two years, three years, coming to fruition,” he said.
